Statement of the problem Research Question Objectives Scope Limitation

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1.2 Statement of the problem Research Question

Based on the contribution of SMEs to GDP in the economy, the government realized the importance of SMEs and provide RM1 billion in 2013 Budget for entrepreneur in accessing the funding. Compared to previous research about SMEs, this topic is concerned about challenges for SMEs in financing. Since the government is encouraging entrepreneur with the allocation to get funding to expand the business, the researcher is interested to investigate about financing preferences adopted by SMEs and how far the financing can impact business performance. The research questions of this case study are as stated below: 1. What are the types of SMEs financing preferences in Melaka food industry? 2. What is the impact of financing sources to business performance? 3. Does SMEs financing have a positive relationship to business performance?

1.3 Objectives

There are three objectives of this research study as stated below: 1. To identify types of SMEs financing preferences in Melaka food industry. 2. To investigate the impact of financing sources to business performance. 3. To examine the relationship between financing and business performance.

1.4 Scope

The focus of this study is to investigate the impact of financing sources to the business performance of SMEs in food industry. For the case study itself, this topic only covers the sources of financing involved and its impact on business performance. The other factors which influence the performance of Malaysian SMEs such as human capital development, market access, legal and regulation environment, innovation and technology adoption, and infrastructure are not to be covered in this case study. 3

1.5 Limitation

1.5.1 Time constraint

The major limitation in conducting this research is due to time constraint. Since this study only takes about one year, there is a time limitation to complete this research. As a degree student, the researcher has another commitment to do. In order to get accurate data, it is a must for the researcher to allocate a long period of time in order to obtain all necessary information. However this research has limited time to gather relevant information on selected topics upon conducting this study hence makes time constraint obviously is the utmost limitation for this case study.

1.5.2 Lack of respondent’s co-operation

Some of the respondents refused to give full co-operation during the questionnaire survey distribution since the times used to distribute the questionnaire were during office hours.

1.5.3 Cost to conduct the research

In order to prepare and finish this research, the cost involved is quite high especially for printing, photocopy of questionnaire for the entire respondent and transportation cost used for questionnaire distribution.

1.6 Importance of the Project